Introduction Singapore has been described as an economic miracle in East Asia Huff In developmental state, the role of controlling economic development is played by the state.
Economic development implies an improvement in economic welfare through higher real GDP, but also through an improvement in other economic indicators, such as improved literacy, better infrastructure, reduced poverty and improved healthcare standards. Policies for economic development could involve: Improved macroeconomic conditions create stable economic climate of low inflation and positive economic growth Free market supply-side policies — privatisation, deregulation, lower taxes, less regulation to stimulate private sector investment.
For developing economies, other issues could involve: Export Oriented Development — Reduction in tariff barriers and promoting free trade as a way to improve economic development.
Diversification away from agriculture to manufacturing as a way to promote economic development. Policies for Economic Development Macroeconomic Stability Macroeconomic stability would involve a commitment to low inflation. Low inflation creates a climate where foreign investors have more confidence to invest in that country.
High inflation can lead to devaluation of the currency and discourage foreign investment. To create a low inflationary framework, it requires: Disciplined Fiscal Policy — i. Therefore, to keep a lid on inflation is an important underlying factor in sustainable economic development. A potential problem of macroeconomic stability is that in the pursuit of low inflation, higher interest rates can conflict with lower economic growth — at least in the short term.
Sometimes, countries have pursued low inflation with great vigour, but at a cost of recession and higher unemployment. This creates a constraint to economic development. The ideal is to pursue a combination of low inflation and sustainable economic growth.
It depends on the economic situation, some countries may be in a situation where there is a fundamental lack of demand due to overvalued exchange rate and tight monetary policy. Therefore, economic development may require demand-side policies which boost aggregate demand.
Macroeconomic stabilisation may involve policies to reduce government budget deficits. However, this may involve spending cuts on social welfare programs. Less Restrictive Regulation and Tackle Corruption Some developing countries are held back by over-restrictive regulation, corruption and high costs of doing business.
To attract both domestic and inward investment, it is necessary to remove these costs and create a climate which is conducive to business. To tackle corruption may not be easy, but it is often one of the biggest constraints to economic development.
Otherwise, economic growth may come at the expense of sustainable development. Several state-owned industries were privatised. This gives firms a profit incentive to cut costs and aim for greater efficiency.
De-regulation involves making state-owned monopolies face competition. This greater competitive pressure can help to create incentives to cut costs. Greater competitive pressures may also be gained through liberalising trade and opening markets to international competition.
A potential problem of privatisation is that it can exacerbate inequality in society. In Russia, privatisation enabled a small number of oligarchs to gain control of key industries at low cost. Effective Tax Structure and Tax Collection One of the challenges developing economies often face is to effectively tax and collect what they are supposed to.entered the lexicon of development economists, international agencies, and mainstream economics (for a recent survey, see Bardhan, ).
2 This essay seeks provides a historical analysis of the rise of high-capacity states in Europe and the rest of the world.
Database of FREE Economics essays - We have thousands of free essays across a wide range of subject areas. Economic Growth and Future of Vietnam. Country Comparison of Economic Development Data. An efficient tax collection and management system is important for a country’s economy growth.
Besides exports, the majority of revenue is. Economic development implies an improvement in economic welfare through higher real GDP, but also through an improvement in other economic indicators, such as improved literacy, better infrastructure, reduced poverty and improved healthcare standards.
Policies for economic development could involve. Vietnam is the only country in Asia to enter Top 5 of the Happy Planet Index (HPI), announced by the New Economics Foundation (NFF) in July Vietnamese peoples are very optimistic to their future thanks to stable political regime, peace and economic growth.
Poverty and Poverty Reduction in Sub-Saharan Africa: An Overview of Key Issues Geoff Handley, Kate Higgins and Bhavna Sharma Trade, investment, industrial development and infrastructure 17 Enabling environment 19 6.
Aid 22 defining poverty) and, secondly, we critically discuss selected policies for economic development and. Economic Development: A Macroeconomic Perspective More than papers use time series modeling to test for Granger causality or cointegration between energy or electricity use and GDP How robust is the effect of electricity infrastructure on economic growth?